Funding Health-Related VR Services: The Potential Impact of the Affordable Care Act on the Use of Private Health Insurance and Medicaid to Pay for Health-Related VR Services

INTRODUCTION - OVERVIEW

One of the myriad of issues affecting the administration of the vocational rehabilitation (VR) program by State VR agencies under Title I of the Rehabilitation Act is how to maximize access to and use of all available funding sources to pay for VR services and supports for VR applicants and clients. In March 2010, Congress passed and the President signed into law the "Affordable Care Act" (ACA). 1 On June 28, 2012, the United States Supreme Court upheld all of the provisions of the ACA, with the exception of provisions mandating Medicaid expansion. The Supreme Court held that if a State chooses not to participate in this expansion of Medicaid eligibility for low-income adults, the State may not, as a consequence, lose Federal funding for its existing Medicaid program.

The ACA includes significant new potential funding sources to pay for health-related VR services and supports, including private health insurance and Medicaid. Under the ACA, essential health benefits, including rehabilitative and habilitative services and devices, will be more readily available to an expanded population of persons through the private insurance market. Also, under the ACA an expanded number of persons may, at a State's discretion, receive health care services under the Medicaid program.

The purpose of this paper is to analyze the potential impact of the ACA on the payment for certain health-related VR services, including physical and mental restoration services, assistive technology devices and services, and personal assistance services. According to RSA-2 (Financial Report) for 2011, the total expenditure for diagnoses and treatment of physical and mental impairments by State VR agencies was $263,920,111, which equals 14 percent of the total amount of purchased services. This amount ranged among State VR agencies from less than 1 percent to 69 percent of the total amount for purchased services. For example, the Florida General Agency expended $34,414,379 for diagnosis and treatment of physical and mental impairments, which represented 30 percent of the total amount expended for purchased services. Thus, for certain States, pursuing strategies that minimize expenditures for physical and mental restoration and other health-related services and supports may increase the amount of funds available for other VR services and to expand the number of clients served.

The applicability of the obligation under the VR regulations that designated State units must determine the availability of comparable services and benefits (such as health care benefits available through private health insurance mandated by the ACA and services and benefits that are provided by other Federal, State, and local programs, such as Medicaid) before providing VR services to an eligible individual using VR funds and the exemption for assistive technology devices and services.

The applicability of the proviso in the VR regulations that physical and mental restoration services may be provided only "to the extent that financial support is not readily available from a source other than the designated State unit such as through health insurance" (e.g., essential health care benefits mandated under the ACA) or a comparable service or benefit.

The impact of the ACA on the obligation under the VR regulations that the designated State unit must maintain written policies regarding an eligible individual's participation in the cost of VR services, to the extent the State includes a requirement that the financial need of the individual be considered.

The impact of the ACA on interagency agreements, including agreements with agencies administering the Medicaid program, State insurance agencies, and agencies administering State Health Care Exchanges. This paper was funded in part by a grant from the National Institute on Disability and Rehabilitation Research (NIDRR) and the Rehabilitation Services Administration (RSA) supporting the Rehabilitation Research and Training Center on Vocational Rehabilitation. The opinions contained in this paper are those of the author and do not necessarily reflect those of NIDRR, RSA, or any other office of the U.S. Department of Education, any other agency or department of the Federal government, any of the States referenced in this paper, or any other organization or individual.

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